IAG Finalizes Order For Up To 150 Boeing 737 MAXs

IAG Finalizes Order For Up To 150 Boeing 737 MAXs

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In June 2019 at the Paris Air Show, International Airlines Group (IAG), the parent company of British Airways, Iberia, Aer Lingus, and Vueling, signed a letter of intent to acquire up to 200 Boeing 737 MAX aircraft.

There were questions about how serious IAG was about the order, given that the 737 MAX was grounded at the time, and it also wasn’t yet a firm commitment. Never mind how the pandemic has changed air travel. It almost seemed like Boeing was offering IAG the option of a great deal in exchange for positive coverage around the troubled jet.

There’s now an update, as IAG has finalized its order for these jets.

Details of IAG’s Boeing 737 MAX order

IAG has now placed a firm order for 50 Boeing 737 MAX jets, with option for a further 100 jets:

  • The firm order for 50 jets includes 25 Boeing 737 MAX 8-200s and 25 Boeing 737 MAX 10s
  • IAG expects to take delivery of these planes between 2023 and 2027
  • These planes have list prices of $120-130 million, so the firm order is worth $6+ billion at list prices, though airlines generally get steep discounts

As Luis Gallego, IAG’s CEO, describes this order:

“The addition of new Boeing 737s is an important part of IAG´s short-haul fleet renewal. These latest generation aircraft are more fuel efficient than those they will replace and in line with our commitment to achieving net zero carbon emissions by 2050.”

For some context on these Boeing 737 MAX variants:

  • The Boeing 737 MAX 10 is the highest capacity version of the Boeing 737 MAX, and can seat up to 230 passengers; the catch is that this plane isn’t certified yet, so it remains to be seen with what timeline this planes flies, given the delays we’ve seen
  • The Boeing 737 MAX 8-200 is a modified version of the Boeing 737 MAX 8 (Ryanair was the launch customer for this variant), which is a smaller version of the 737 MAX; the “-200” here means that the plane has additional exits, allowing more seats to be installed, so the plane can have up to 200 seats

While it’s nice to see this order finalized, it’s still a far cry from what was originally announced. A few years ago IAG stated it would order up to 200 of these jets, but in reality this deal consists of just 50 firm orders, with an additional 100 options.

Ryanair was the launch customer for the 737 MAX 8-200

Which airline are these jets going to?

IAG has primarily used Airbus jets for narrow body flights, as British Airways, Iberia, Aer Lingus, and Vueling, all operate narrow body Airbus jets. Back in 2019, Willie Walsh (who was IAG CEO at the time) explained that the decision to place a narrow body order with Boeing was motivated by frustration with Airbus.

That’s because IAG was experiencing significant delays on Airbus A320neo deliveries, and IAG also wanted a mixed narrow body fleet, so that the airline isn’t entirely reliant on one manufacturer. I suppose that’s fair enough with what’s going on, though Boeing isn’t exactly a more reliable manufacturer than Airbus.

I think the other major question here is which airline these planes will be going to, since 50 jets isn’t exactly enough to refresh the narrow body fleets of four airlines. Furthermore, it wouldn’t be efficient to just send a dozen of these to each IAG carrier, given the cost of training, maintenance, etc. A few thoughts:

  • At this point British Airways has fewer than 10 Airbus A320neo-family aircraft on order, so there’s no denying that the airline will need to further refresh its fleet over the coming years; my guess is that at least some of these jets are bound for British Airways
  • Vueling has a further 30 Airbus A320neo and A321neo-family aircraft on order, though I could see some 737 MAXs going to this Spanish ultra low cost carrier
  • I don’t necessarily think Iberia will be getting any of these jets, since the carrier has a smaller short haul fleet than British Airways and Vueling, and has already received quite a few new Airbus A320neos
  • Aer Lingus is arguably most in need of new narrow body jets, as the airline doesn’t have any “next generation” Airbus jets so far; then again, Aer Lingus seems to be the IAG carrier most neglected when it comes to fleet renewal
Vueling exclusively operates Airbus narrow body jets

Bottom line

IAG, the parent company of British Airways, has just finalized an order for up to 150 Boeing 737 MAX jets. This includes a firm order for 50 planes, and options for a further 100 planes. IAG plans to buy 25 of each of the 737 MAX 8-200 and 737 MAX 10 model, and deliveries are expected between 2023 and 2027.

What do you make of this IAG Boeing 737 MAX order being finalized?

Conversations (9)
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  1. Jules Guest

    It doesn’t matter which airline it goes to, you can’t use software to get yourself out of an engineering design flaw, ie them engines should not be getting used on that airframe. The MAX should be scrapped and back to the drawing board

  2. LHR Guest

    Let's hope those planes go to BA. I see a lot of negative risk for Vueling's operation plans. Financially and safety.

  3. James Guest

    Well I have an observation regarding Boeing 737 Max.
    After the crash incident of two aircraft in the similar way, the faulty operative system and malfunctioing of software are pointed out. The reliability of the aircraft is at stake. Hence it is not a safe aircraft to fly with.

    1. Eskimo Guest

      I just love comments like this.

      Under your observation logic, same could be said with Boeing? Hence Boeing is not a safe aircraft?

  4. Clayton Guest

    There was, and remains, a lot of pushback from BA FFs about Max's being added to the fleet. It was actually taken onboard by, then, management but of course it's anybody's guess what they eventually do regarding that pushback.

    The comments about at least some of them being placed at LGW for the new EuroFlyer brand so it has seat density to compete with EZY and TUI is logical and although no blog I've...

    There was, and remains, a lot of pushback from BA FFs about Max's being added to the fleet. It was actually taken onboard by, then, management but of course it's anybody's guess what they eventually do regarding that pushback.

    The comments about at least some of them being placed at LGW for the new EuroFlyer brand so it has seat density to compete with EZY and TUI is logical and although no blog I've read about this has yet picked up on it. Boeing did build a maintenance hanger and facilities there only a couple years back which would add a reason for placement there but at the same time none of the crew based there has flown on a Boeing single aisle in longer than I can remember so 8t would require both pilots and CC to undergo total retraining. Whilst that actually applies across IAG as a whole the unit costs of that training are substantially higher in the UK than in other brands locations and we aren't talking small change in that difference either.

    Vueling is the 'natural' choice simply by pax demographic and ULCC model so I think we might see some reallocation of 320 fleet across brands feeding them to EF in a swap out / cascade approach. They already fly into LGW so could avoid the need to run empty ferry flights for maintenance. IB express being another contender

  5. stogieguy7 Diamond

    Those MAX 8-200's scream "budget airline" - so if they're not going to Vueling, IAG has lost it's mind. Bad enough they're choosing 737 MAX10's over the A321neo, but the 8-200 cattle car sounds like torture.

    Also, doesn't Aer Lingus have A321LR's in service? Those are most recent generation, IIRC.

  6. RKC Guest

    Aer Lingus seem to be picking up 6 A320neos this summer (4 that were meant for smartavia and 2 direct from airbus) suggesting that IAG will keep aer lingus on the a320neo family in future. Maybe BA’s LGW operations will get them? The MAX 8-200’s would be competitive economically out of LGW against the likes of easyJet ryanair and TUI

  7. AA70 Member

    I'd like to see the remaining A320neo family on order with Vueling transferred to BA and they instead get these

  8. Nikojas Guest

    Let's hope the Max 8-200s go to Vueling so we can avoid them more easily.

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Nikojas Guest

Let's hope the Max 8-200s go to Vueling so we can avoid them more easily.

3
Jules Guest

It doesn’t matter which airline it goes to, you can’t use software to get yourself out of an engineering design flaw, ie them engines should not be getting used on that airframe. The MAX should be scrapped and back to the drawing board

0
LHR Guest

Let's hope those planes go to BA. I see a lot of negative risk for Vueling's operation plans. Financially and safety.

0
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